In the last budget the Chancellor announced that the Annual Investment Allowance (AIA) will be reduced from £100,000 to £25,000 from April 2012. At the same time there will also be a reduction in the writing down allowance from 20% to 18%. The result is that for a business who purchases capital assets after this date using the traditional methods of a hire purchase arrangement will have to wait longer to receive the tax relief in this business.
In order to accelerate the tax relief, you could consider acquiring the asset by way of lease financing. Instead of claiming capital allowances over the life of the business, the finance charges and accounting depreciation are instead deductable from taxable profits. Admittedly hire purchase arrangements result ultimately in the ownership of the asset whereas lease financing is simply the leasing of an asset which will be returned at the end of the lease or secondary lease. However, the more immediate tax relief may result in this becoming an attractive route to acquire considerable asset purchases in the future.